SDLTM27500 - Reliefs: Certain acquisitions by registered social landlords

FA03/S71 provides exemption from SDLT for purchases undertaken by registered providers of social housing.

In brief land transactions entered into are exempted where the purchaser is a profit-making registered provider of social housing and the transaction is funded with the assistance of a public subsidy.

Land transactions are also exempted from SDLT where the purchaser is a relevant housing provider and one of the following three conditions are met:

  • a) the relevant housing provider is controlled by its tenants
  • b) the vendor is a qualifying body, or
  • c) the transaction is funded with the assistance of a public subsidy

Meaning of references used within FA03/S71

For the purposes of S71, a ‘relevant housing provider’ is defined as a non-profit registered provider of social housing or a registered social landlord.

The Regulator of Social Housing maintains the list of registered providers of social housing and designates the provider’s status as “Profit”, “Non-profit” or “Local authority”. HMRC’s view is that local authorities are inherently non-profit by nature and therefore a local authority which is included on the list of registered providers is a non-profit registered provider for the purposes of S71. The register can be found at Registered providers of social housing.

References to relevant housing provider controlled by its tenants, qualifying body and public subsidy mean the following:

A) Relevant housing provider controlled by its tenants

This means that the majority of the board members of the relevant housing provider are tenants occupying properties owned or managed by it.

In this section a ‘board member’ is regarded to be

  • if it is a company, a director of the company
  • if it is a body corporate whose affairs are managed by its members, one of those members
  • if it is a body of trustees, one of those trustees
  • otherwise, a member of the management committee or other body which is entrusted with the management of the relevant housing provider’s affairs.

B) The vendor is a qualifying body

Qualifying bodies are

  • a relevant housing provider
  • a housing action trust established under Part 3 of the Housing Act 1988
  • a principal council within the meaning of the Local Government Act 1972
  • the Common Council of the City of London
  • the Scottish Ministers
  • a council constituted under Section 2 of the Local Government etc. (Scotland) Act 1994
  • Scottish Homes
  • the Department for Social Development in Northern Ireland
  • the Northern Ireland Housing Executive

C) The transaction is funded with the assistance of a public subsidy

A public subsidy means any grant or other financial assistance

  • made or given by way of a distribution under Section 25 of the National Lottery etc Act 1983 (application of money by distributing bodies)
  • under Section 18 of the Housing Act 1996 (social housing grants)
  • under Section 126 of the Housing Grants, Construction and Regeneration Act 1996 (financial assistance for regeneration and development)
  • under section 19 of the Housing and Regeneration Act 2008 (financial assistance by the Homes and Communities Agency);
  • made or given by the Greater London Authority
  • under Section 2 of the Housing (Scotland) Act 1988 (general functions of the Scottish Ministers)
  • under Article 33 or 33A of the housing (Northern Ireland) Order 1992
  • under section 31 of the Local Government Act 2003 towards expenditure incurred or to be incurred on the provision of social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008 (see sections 68 and 72 of that Act). Grants given under s31 LGA 2003 apply in relation to land transactions with an effective date on or after 15 March 2023.

The transaction does not have to be fully funded with the public subsidy. There is no set minimum amount or level of funding required for the exemption to apply. As long as the purchase is partially funded with a public subsidy listed above, then the exemption will apply (subject to the purchaser also being a relevant housing provider).

Where a land transaction return is filed on the basis that the exemption applies, relief code “23” should be used.